Tuesday, May 15, 2012

#Leveson: 1998 - #Murdoch Called #Blair For A 'Favour'.

Memo shows how Blair aided Murdoch

A newly disclosed Downing Street memo has revealed how Tony Blair helped Rupert Murdoch overcome an official investigation which was jeopardising one of his big investments. It shows that Blair, while prime minister, immediately ordered his top officials to help the tycoon who was frustrated that a potentially lucrative scheme was being blocked by a long-running European commission investigation.

Blair told the media magnate that "he was instinctively sympathetic to what Murdoch was aiming to achieve". The tycoon eventually won approval for the plan. BSkyB had teamed up with other big companies to develop an interactive scheme in which people could shop and manage their finances through their televisions.

The memo is the first to be disclosed under freedom of information legislation documenting the contents of meetings between Murdoch and Blair. Blair has been accused of granting political favours to Murdoch in return for support from his newspapers; Lance Price, a former Downing Street spin doctor, said Murdoch seemed to be one of the four most influential people in the administration.

The memo reveals an episode in 1998 - a year after the Sun's conversion to Labour - in which Murdoch appears to call in one of those favours. Murdoch had privately approached Blair when he feared that the European commission investigation was hindering his business opportunities.

Blair gathered members of his inner circle to see the tycoon - his chief of staff, Jonathan Powell; James Purnell, then a Downing Street special adviser on the media and now a cabinet minister; and his press secretary, Alastair Campbell.

Murdoch complained that the investigation by the European competition commissioner into one of his planned television schemes was costing him money. He told Blair: "The competition commissioner, [Karel] Van Miert, had come up a long list of complaints and the project was being delayed at huge cost. Sky's own investment was very significant (£800m so far) and the success of the venture was crucial to their overall plans for developing digital services."

According to the memo of the meeting in January 1998, Blair backed Murdoch, saying "it was important that the UK remained at the cutting edge of developing this kind of media product". The prime minister envisaged Europe being dominated by four or five big media groups - with Sky as one - competing against each other, adding "that meant genuine cross- border competition, not a heavy regulatory approach from the commission".

The memo was released after a lengthy battle to Michael McCarthy, a retired further education teacher, who said yesterday he had wanted to know how an unelected businessman was influencing policy in return for the support of the Sun. The year after the meeting, Van Miert gave the television project the go-ahead with some restrictions.

Initially the service, known as British Interactive Broadcasting, performed well but by 2001 it collapsed as people found it easier to shop on the internet.